M/s. Malappuram District Co-operative Bank Ltd, Malappuram V. The ACIT, Tirur

ITA 57/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77428 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-02-2014
• Court: TRIBUNAL
• Department Lawyers: K K JOHN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 57 & 58/COCH/2014 ASSESSMENT YEARS : 2008-09 & 2009-10 MALAPPURAM DISTRICT CO-OP BANK LTD., P.B. 8, UP HILL, MALAPPURAM-676 505. [PAN: AAAAT 3207B] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), TIRUR. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI SHAJI POULOSE, CA REVENUE BY SHRI K.K. JOHN, SR. DR DATE OF HEARING 08/04/2014 DATE OF PRONOUNCEMENT 11/04/2014 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDERS PASSED BY THE LD. CIT(A), KOZHIKODE AND THEY RELATE TO THE ASSESSMENT YEARS 2008-09 AND 2009-10. 2. SINCE THE ISSUE URGED IN BOTH THE APPEALS IS I DENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 3. THE SOLITARY ISSUE URGED IN BOTH THE APPEALS REL ATES TO THE DEFINITION OF RURAL BRANCH FOR THE PURPOSE OF ARRIVING AT DEDUC TION U/S. 36(1)(VIIA) OF THE ACT. I.T.A. NOS.57&58 /COCH/2014 2 4. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE STATED IN BRIEF. IN TERMS OF SEC. 36(1)(VIIA)(A) OF THE ACT, THE ASSESSEE HEREIN IS ENTITLED FOR A DEDUCTION OF PROVISION MADE FOR BAD AND DOUBTFUL DEBT AT AN AMOU NT NOT EXCEEDING 7.5% OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCT ION UNDER 36(I)(VIIA) AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF THE ASSESSEE BANK. THE TERM RURAL BRANCH IS DEFINED AS UNDER IN THE EXPLANATION TO SE C. 36(1)(VIIA) OF THE ACT:- RURAL BRANCH MEANS A BRANCH OF A SCHEDULED BANK O R A NON-SCHEDULED BANK SITUATED IN A PLACE WHICH HAS A POPULATION OF NOT MORE THAN TEN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR THE ASSESSEE INTERPRETED THE TERM A PLACE AS THE WARD WITHIN THE REVENUE VILLAGE AND ACCORDINGLY CLAIMED DEDUCTION ON THE AD VANCES WHERE THE POPULATION OF THE WARD WAS LESS THAN 10,000. HOWEVER, THE ASS ESSING OFFICER REJECTED THE SAID CLAIM AND HELD THAT THE POPULATION OF THE VILL AGE PANCHAYAT LEVEL SHOULD BE CONSIDERED FOR ASCERTAINING RURAL BRANCHES. SINC E THE POPULATION OF THE VILLAGE PANCHAYATS, WHERE THE BRANCHES OF THE ASSESSEE BANK ARE LOCATED, WAS MORE THAN 10,000/-, THE AO REJECTED THE CLAIM FOR DEDUCT ION OF 10% OF RURAL ADVANCES CLAIMED BY THE ASSESSEE. 5. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER BY FOLLOWING THE DECISION RENDERE D BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LORD KRISHNA BANK I.T.A. 234/2 009 (195 TAXMAN 57), WHEREIN THE HONBLE HIGH COURT HAD HELD THAT THE TE RM A PLACE SHOULD BE CONSIDERED AS THE GRAMA PANCHAYAT, WHICH IS THE PRI MARY UNIT OF THE GOVERNMENT, NOT THAT OF THE WARD. AGGRIEVED, THE A SSESSEE HAS FILED THESE APPEALS BEFORE US. I.T.A. NOS.57&58 /COCH/2014 3 6. AT THE TIME OF HEARING, BOTH THE PARTIES AGR EED THAT THE LD. CIT(A) HAS FOLLOWED THE BINDING DECISION RENDERED BY THE HONB LE JURISDICTIONAL HIGH COURT OF KERALA IN THE CASE OF LORD KRISHNA BANK LTD (REFERR ED SUPRA). SINCE THE LD CIT(A) HAS FOLLOWED THE BINDING DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF LORD KRISHNA BANK LTD. (SUPRA), WE DO NOT F IND ANY REASON TO INTERFERE WITH THE DECISION RENDERED BY LD. CIT(A) ON THIS IS SUE IN BOTH THE YEARS. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 11-04-2 014. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 11TH APRIL, 2014 GJ COPY TO: 1. MALAPPURAM DISTRICT CO-OP BANK LTD., P.B. 8, UP HILL, MALAPPURAM-676 505. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(2), TIRUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), KOZHIKO DE. 4. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN